a guide to understanding gst … · positionfor our nation’sfuture. inthisbooklet, wewilloutline...

A GUIDE TO UNDERSTANDING GST KEY CONCEPTS AND PRINCIPLES

QuickBiz Solutions Sdn Bhd ©

A GUIDE TO UNDERSTANDING GST 2

Version 1.1 Jan 2015 Copyright © QuickBiz Solutions Sdn Bhd

Copyright All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the prior permission of the author. This book may not be resold, hired out, or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the author. Disclaimer No person should rely solely on the contents of this publication without first obtaining advice from a professional person. This publication is given on the basis that (1) the author and publisher are not responsible for the results of any action taken based on the information provided within this publication, nor for any error in or omission from this publication; and (2) the publisher is not engaged in rendering legal, accounting, professional or other advice or services. The author and publisher expressly disclaim all and any liability and responsibility to any person, whether a reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication. Published in Malaysia QuickBiz Solutions Sdn Bhd 12A-2, Jalan Puteri 2/4, Bandar Puchong Puteri, 47100 Puchong, Selangor D.E. Printed in Malaysia



Preface A Guide to Understanding GST: Key Concepts and Principles is an attempt to give concise answers to many of your questions concerning Malaysia’s endeavor to create a more sustainable fiscal position for our nation’s future. In this booklet, we will outline a general guide and an overview for people to have a clear understanding of the clockwork mechanisms behind GST. To your benefit, we understand that ‘a picture paints a thousand words’ and we have included mindmaps and flowcharts to better explain GST and its implications to everyone.

In the appendix of this booklet, we have included industry-specific guide references that will give your business further guidance on the implementation of GST. Once you have identified the relevant guides applicable to your business, we would like to assist you in preparing for the coming change in our tax regime. With proper time and resources, we also hope to come out with guidance notes that are industry-specific to help your business. The last portion of our booklet, ‘Getting Ready for GST’, is a summary of the areas that need preparation.

As an endnote, our purpose is clear: we want to give you a full picture of how GST will impact your business. Please do not hesitate to contact us at [email protected] with your enquiries.

~ QuickBiz Solutions Sdn Bhd



Table of Contents Preface ................................................................................................................................................................................................................. 3

Chapter 1: Introduction..................................................................................................................................................... 7 What is Goods and Services Tax (“GST”)? ........................................................................................................................................... 8 Why Will GST Be Introduced? ................................................................................................................................................................ 10 When Will You Face GST? ........................................................................................................................................................................ 11 How does GST Work? ................................................................................................................................................................................. 13

Chapter 2: GST Regulatory Framework .....................................................................................................................18 GST Act 2014 .................................................................................................................................................................................................. 19 GST Regulations ........................................................................................................................................................................................... 19 GST Orders ...................................................................................................................................................................................................... 19 GST Guides ...................................................................................................................................................................................................... 20

Chapter 3: Registration ...................................................................................................................................................21 Liability to Register .................................................................................................................................................................................... 22 Taxable Turnover ........................................................................................................................................................................................ 24 Responsibilities of a Registered Person ............................................................................................................................................. 25 Types of Registrations ............................................................................................................................................................................... 26 Other Types of Registrations .................................................................................................................................................................. 28 End of Registration ..................................................................................................................................................................................... 30 General Information on Registered Persons ................................................................................................................................... 32

Chapter 4: Supply of Goods and Services ..................................................................................................................34



Form of Supply .............................................................................................................................................................................................. 35 Time of Supply ............................................................................................................................................................................................... 36 Place of Supply .............................................................................................................................................................................................. 43 Value of Supply ............................................................................................................................................................................................. 45

Chapter 5: Imported and Exported Goods and Services ......................................................................................48 Imported Services ........................................................................................................................................................................................ 49 Exported Services ........................................................................................................................................................................................ 51 Imported Goods ............................................................................................................................................................................................ 51 Exported Goods ............................................................................................................................................................................................. 51

Chapter 6: Tax Invoice and Record Keeping ............................................................................................................52 Tax Invoice ...................................................................................................................................................................................................... 53 Record Keeping ............................................................................................................................................................................................. 64

Chapter 7: Credit Notes, Debit Notes and Bad Debt Relief ..................................................................................67 Credit Notes .................................................................................................................................................................................................... 68 Debit Notes ..................................................................................................................................................................................................... 70 Credit and Debit Note Format ............................................................................................................................................................... 72 Bad Debt Relief ............................................................................................................................................................................................. 73

Chapter 8: Taxable Period, Accounting Basis, Furnishing of Returns and Payment of Tax ...................77 Taxable Period .............................................................................................................................................................................................. 78 Accounting Basis .......................................................................................................................................................................................... 79 GST Returns .................................................................................................................................................................................................... 80 Payment of Tax ............................................................................................................................................................................................. 80



Penalty for Late Payment ........................................................................................................................................................................ 82 GST Declaration and Payment by Non-Taxable Person ............................................................................................................ 82

Chapter 9: Input Tax .........................................................................................................................................................83 Input Tax ......................................................................................................................................................................................................... 84 Mechanism to Claim Input Tax ............................................................................................................................................................. 85 Allowable Input Tax ................................................................................................................................................................................... 85 Criteria for Claiming Input Tax ............................................................................................................................................................ 86 Blocked Input Tax........................................................................................................................................................................................ 87 Incidental Exempt Financial Supplies ................................................................................................................................................ 88 Refund of Input Tax .................................................................................................................................................................................... 89

Getting Ready for GST ......................................................................................................................................................90

Appendix...............................................................................................................................................................................91 Source of Information................................................................................................................................................................................ 92 Guides ................................................................................................................................................................................................................ 94 GST Forms ....................................................................................................................................................................................................... 99 Important Definitions ............................................................................................................................................................................. 102 Penalties ........................................................................................................................................................................................................ 106



Chapter 1: Introduction

How Does GST Work?

What is GST?

Why GST?



What is Goods and Services Tax (“GST”)? GST is a tax charged on any supply of goods or services made in Malaysia (inclusive of everything treated as a ‘supply’ under the Act) and importation of goods into Malaysia. Simply put, GST is a tax on consumption known in many countries as value-added tax. A consumer pays GST whenever he or she buys goods and services from a GST-registered business. GST is charged on any supply of goods and services made in Malaysia where it is deemed a taxable supply made by a taxable person in the course of business. Tax on imported goods into Malaysia shall be charged or levied as if it were a customs duty or excise duty. Where any registered person displays, advertises, publishes or quotes the price of any supply of goods and services, such price must include GST.



What is Goods and Services Tax (“GST”)?

Old Sales & Service Tax

•Taxation at point of sale @ specific rate •Various thresholds

New Goods & Services Tax

•Standard rate - 6% •Threshold -

RM500,000



Why Will GST Be Introduced?

Economics Standpoint

•It is a more effective and efficient way to collect taxes. It generates a stable and predictable tax income for the government in both good and weak economic environments.

Business Standpoint

•If your customers are GST-registered businesses, they will prefer to deal with GST-registered suppliers so that they can claim the GST back from the sales invoices. Your company will be viewed to be more professional and will stand out from the other firms that are not registered.

Individual Standpoint

•GST is a fairer tax system. It taxes the self-employed and wage earners only when they spend their money.



When Will You Face GST? GST Timelines

1983

•A research team was sent to South Korea to study the potential of GST in order to implement a more sustainable, broad-based consumption tax system.

30 Oct 1992

•The finance minister then, Dato' Seri Anwar Ibrahim announces GST for the 1993 budget, but it was later postponed.

10 Sep 2004

•Dato' Seri Abdullah bin Ahmad Badawi, the Prime Minister then, announces GST for the 2005 budget which would have come into effect by 1 Jan 2007, but it was later postponed in 2006 to give time for businesses to adapt to changes.

2009

•The 2009 GST Tax Bill was tabled for reading at the Dewan Rakyat in the budget. It was deferred to ensure that laws and regulations would be in place.



What is Happening Next?

25 October 2013

• Prime Minister Datuk Seri Najib Razak declares GST of 6% in Malaysia which will commence from 1 Apr 2015.

1 January 2015

• GST system makes it compulsory for businesses which exceed the prescribed threshold to register for GST.

1 April 2015

• GST-registered businesses begin to charge 6% GST.



How does GST Work? Taxable Supplies Taxable supplies mean supplies of goods or services that are standard-rated supplies, or zero-rated supplies. Taxable supplies do not include exempt supplies. Taxable Person A taxable person means any person who is or is liable to be registered under the Goods and Services Tax. Rate of GST The rate of GST is 6% at every stage of the supply chain for most of the goods and services. Types of Supply

Types of Supply Output Tax Input Tax Standard-rated 6% Claimable Zero-rated 0% Claimable Exempted No GST charged Not Claimable Out of Scope Disregard GST Not Claimable



How Does GST work?



Scope of Tax



Are you required to register for GST?



Chapter 2: GST Regulatory Framework



GST Act 2014 “An Act to provide for the imposition and collection of goods and services tax and for matters connected therewith.” Source: http://www.federalgazette.agc.gov.my

GST Regulations Advance rulings made under Section 177 of the Goods and Services Tax Act 2014. Currently, GST Regulations include Advance Rulings Regulations and Review and Appeal Regulations. Source: http://www.federalgazette.agc.gov.my

GST Orders GST Orders are made under a specific section in the GST Act. They are tabled at the Dewan Rakyat and have a ‘come into operation’ date. Contravening an order will result in some form of penalty. Source: http://www.federalgazette.agc.gov.my



GST Guides GST Guides are found at the Royal Malaysian Customs Department’s GST website. The guides are divided into the following:

1. General Guide 2. Industry Guides 3. Specific Guides 4. Accounting Software Guide 5. Tax Agent Guides

Source: http://gst.customs.gov.my

“The Eiffel Tower is the Empire State Building after taxes.” ~ Anon.



Chapter 3: Registration



Liability to Register A person is required to be registered for GST if he makes taxable supplies exceeding RM500,000 (annual taxable turnover). The annual taxable turnover can be defined as the total value of taxable supplies excluding the amount of GST for the year. A person making zero-rated supplies must be registered for GST if the value of his annual taxable turnover exceeds RM500,000. He can, however, apply for an exemption from registration from the Director General (if exempted, he cannot claim input tax).

“The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing.” ~ Jean Baptiste Colbert



Liability to Register

You have a liability to register for GST if: Situation A At the end of the month, the total value of all your taxable supplies in that month and the 11 months preceding the month exceeds RM500,000.

Situation B At the end of the month, you have reasonable grounds to believe that the total value of all your taxable supplies in that month and the next 11 months succeeding the month exceeds RM500,000.

Please note: The value of taxable supplies should be calculated on all taxable supplies (both standard and zero-rated) for a period of 12 months excluding: (a) capital assets disposed; (b) imported services; (c) disregarded supplies made in relation to the Warehousing Scheme or disregarded supplies made within or between designated areas; (d) supplies made by a person who belongs in a country other than Malaysia or a recipient, in accordance with the Approved Toll Manufacturer Scheme.



Taxable Turnover The value of all taxable supplies that needs to be included in the calculation of your annual taxable turnover includes:

Category of Person Taxable Turnover A company The value of all taxable supplies made by that

company A company with divisions or branches The value of all taxable supplies from all

divisions and branches A sole proprietor/ an individual The value of all taxable supplies of his

business A partnership The value of all taxable supplies by the

partnership A single taxable person The value of all taxable supplies by the

business entities registered as a single taxable person

A joint venture The value of all taxable supplies made by the joint venture



Responsibilities of a Registered Person A registered person must:

1. account for GST on taxable supplies; 2. submit GST return and pay tax by the due date; 3. issue tax invoice on any taxable supply; 4. inform Customs of the cessation of business within 30 days from the date of business

cessation; 5. inform Customs on any changes of address, taxable activity, accounting basis and taxable

period; and 6. keep adequate records of his business transactions relating to GST in the national or

English language for seven (7) years.

“The point to remember is that what the government gives it must first take away.” ~ John S. Coleman



Types of Registrations Mandatory Registration Any person who is liable to be registered must notify the Director General of the liability by applying to be registered in the prescribed form within 28 days from the end of the month where taxable turnover exceeds or is expected to exceed RM500,000. The effective date of mandatory registration is on the first day of the month following the month he is required to notify his liability to be registered. Failure to register within the required timeframe may result in a late registration penalty. A person may apply for registration by completing and submitting (either on-line or manually to the nearest Customs’ office) the prescribed form GST-01.

“Next to being shot at and missed, nothing is quite as satisfying as an income tax refund.” ~ F.J. Raymond



Voluntary Registration Any person in Malaysia can apply for voluntary registration even if his annual taxable turnover is below RM500,000. A person can be registered voluntarily if he intends to make taxable supplies by submitting the following documents to the Director General:

1. details of business arrangements (business plans, plants, location); 2. copies of contracts for establishment of premises such as rental of premises / construction

of pipelines/ purchase of equipment; 3. details of any patents; 4. details of business purchases; or 5. other documentary evidence.

Please be reminded of the following with regards to voluntary registration:

1. Once registered, you are considered a taxable person; 2. You must obtain the Director General’s approval to be registered; and 3. You shall be registered for at least 2 years.



Other Types of Registrations Registration of societies or similar organizations Societies, non-profit organizations, charities or cooperatives are required to be registered if their supplies of taxable goods and services exceed the prescribed threshold. Group Registration Two or more companies may be eligible to be treated as members of a group for registration purposes. In the cases of group registrations, a member of the group will be nominated as the representative member for registration purposes. All members of the group shall be jointly and severally liable for any tax due and payable by the representative member.



Where companies have been treated as a group –

Taxable supplies of goods and services by a member of the group to another member shall be disregarded;

Any taxable supply of goods and services by or to a member of the group shall be treated as a supply by or to the representative member.

Any business carried on by a member of the group shall be treated as carried on by the representative member; and

Any importation of goods or supply of imported services by any member of the group shall be treated as being imported by the representative member.



End of Registration Any taxable person shall cease to be liable to be registered when the value of all his taxable supplies in the period of 12 months falls below RM500,000. The end of liability for mandatory registration is when:

1. a person ceases to make a taxable supply; or 2. a person ceases to have the intention of making a taxable supply; or 3. a person ceases to make or ceases to have the intention of making a supply outside

Malaysia which would be a taxable supply if made in Malaysia; or 4. the value of taxable supplies for a period of twelve (12) months succeeding will not exceed

the prescribed threshold i.e. taxable turnover for the next twelve (12) months will not exceed the registration threshold.



A registered person may cancel his registration if his liability to be registered has ceased. The registration of any person may also be cancelled by Customs if it is found that the person is not liable or eligible to be registered. A person who ceases (or has the intention to cease) making taxable supplies shall notify the Director General in writing within 30 days from the date of cessation or intention to cease. Application for registration cancellation can be made by completing and submitting the form GST-Adm4 either on-line or manually to the nearest Customs’ office.

“The promises of yesterday are the taxes of today.” ~ William Lyon Mackenzie King



General Information on Registered Persons A registered person must notify the Customs office within thirty (30) days from the date of any changes to his business. A person who is liable to be registered but fails to apply for GST registration should immediately apply for registration. Tax due will be collected for a period of not more than six (6) years from the effective date of registration. A late registration penalty of not more than twenty five percent will also be imposed on the unpaid tax due. If the person refuses to be registered, he shall be liable to a fine not exceeding RM50,000 or to imprisonment for a term not exceeding three (3) years or to both. A person who is not liable to be registered is not allowed to charge and collect GST. He can only collect and charge GST after he has registered voluntarily.



Chapter 4: Supply of Goods and Services



Form of Supply



Time of Supply For the purposes of GST, the time of supply of any goods or services is when they are made available or performed. It is important to know the time of supply because a taxable person may only charge GST at the time that the supply is made. A taxable person will subsequently account for all taxable supplies for a particular taxable period that the time of supply occurs. As a general rule, the basic tax point is:

1. When goods are removed or when goods are made available to a customer; or 2. When services are performed.

Please note that a service is considered “performed” when work is done or completed by the supplier of services. Time of Supply Time of Supply of Goods

Time of Supply of Services At the time of removal of the goods. At the time when the services are

performed. At the time when the goods are made available. At the time when it becomes certain that the taxable supply has taken place.



Exceptions to the General Rule Tax Invoice Issued or Payment Received Before the Basic Tax Point If a tax invoice is issued, or any payment is received (whether full or partial) before the basic tax point previously mentioned, then the time of supply will be the date of the invoice issued or the date the payment is received, whichever is earlier. In other words, the time of supply is the earliest of:

1) the date when goods are removed/made available or when services are performed, 2) the date of the tax invoice issued; and 3) the date the payment is received.

21 Days Rule If a supplier does not receive any payment before the basic tax point, but issues a tax invoice within 21 days from the basic tax point, the time of supply will be the date of the invoice issued. (Note: For a comprehensive list of exceptions to the general rule, please refer to the General Guide at gst.customs.gov.my)



Examples for Exceptions to the General Rule Example 1

Payment or Invoice Received First?

Invoice Issued Within 21 Days?

Time of Supply

N.A. N.A. 1/5/2015



Example 2



Time of Supply

Payment N.A. 3/5/2015



Example 3



Time of Supply

Invoice N.A. 1/6/2015



Example 4



Time of Supply

N.A. Yes 21/5/2015



Example 5



Time of Supply

N.A. Yes 21/5/2015



Place of Supply Supplies of goods or services must be made in Malaysia for GST to be chargeable. Goods shall be treated as supplied in Malaysia if the goods are:

1. in Malaysia; or 2. removed from a place in Malaysia.

Services, on the other hand, are treated as supplied in Malaysia if the provider of the services belongs in Malaysia. Please note that GST is applicable only on a taxable supply of goods or services made in Malaysia. Any supply of goods or services not made in Malaysia is outside the scope of GST.

Type of Goods and Services GST Collection Parties Supplies of goods and services in Malaysia

GST-registered businesses

Imported goods and services Royal Malaysian Customs



Is The Supplier Treated as Belonging in Malaysia?



Value of Supply Supply for a Consideration in Money The general rule for valuation is applicable when the supply is rendered for consideration wholly in money. When the supply is made for consideration wholly in money, the value for GST purposes is the price paid or payable excluding the GST itself. Thus, the value for GST purposes is the part of consideration, that when added with GST, equals the total consideration involved. The GST portion of a consideration inclusive of GST can be obtained by multiplying the consideration with the GST fraction (GST fraction = 6/106 since GST is 6%). Supply for a Consideration not in Money (“In Kind”) For a supply made for consideration in kind, the value shall be the open market value less GST. Supply for Consideration Partly in Money and Partly in Kind A supply made for consideration partly in money and partly in kind is treated differently. The value of supplies of this category will be the aggregate of the consideration in money and the open market value of the consideration not in money.



Supply Made for No Consideration For supplies made for no consideration, the value for GST purposes will be based on the open market value of the supply. Value for Imported Goods The value for imported goods will be the aggregate of the following:- (a) value determined for customs purposes; (b) customs duty paid; and (c) excise duty paid. Please note that the Customs will impose GST on the above value. For your further reference, please see the table of the next page for a summary of the value of supply.



Value of Supply

Value of Supply of Goods or Services Type of Consideration Value

Consideration in money Equal to the monetary amount of that consideration less chargeable tax

Consideration not in money

Equal to the open market value of that consideration less chargeable tax

Consideration not wholly in money

Aggregate of: 1. Consideration in money; and 2. Open market value of that consideration not in money; 3. Less: Chargeable tax

No consideration Equal to the open market value of that consideration less chargeable tax

Value of Goods Imported Sum of the following:

1. Value of goods for the purposes of customs duty; 2. Amount of customs duty paid on the goods; and 3. Amount of excise duty paid on the goods.

Please note: You should not attempt to value a supply until you have established what the consideration is.



Chapter 5: Imported and Exported Goods and Services



Imported Services Imported services are services that are made by a supplier that does not belong to Malaysia to a recipient who belongs to Malaysia and such services are consumed in Malaysia. GST Liability on the Recipient of Imported Services In the case of imported services, GST liability shifts from the supplier to the recipient since the supplier is not in Malaysia. The recipient is liable to account for GST on the supply made for the purpose of any business carried on by him. If the imported services are not used for business purposes, the recipient is not liable to account for GST.



Accounting for Supply of Imported Services A person who receives a supply of imported services for the purpose of business is treated as if he is making and receiving the supply. That supply of imported services would have to be accounted for GST as his output tax. If the imported services are used for making taxable supplies, input tax can be claimed. However, if the imported services are used for making tax exempt supplies, GST cannot be claimed as his input tax.



Exported Services All exported services are zero-rated provided the conditions are met as specified under the Goods and Services Tax (Zero-Rated Supply) Order.

Imported Goods All goods imported into Malaysia are subject to GST unless it is specifically relieved or placed under the GST (Relief) Order and subject to the conditions that are prescribed.

Exported Goods An exporter can zero rate his supply of goods when the goods are exported.

“Ask not what your country can do for you, but how much it's going to cost you for them to do it.” ~ Anon.



Chapter 6: Tax Invoice and Record Keeping



Tax Invoice Issuance of tax invoice As a general rule, every registered person who makes taxable supplies of goods or services during the course of business activities must issue a tax invoice. The supplier must keep a copy of the tax invoice and the recipient should retain the original copy of the invoice. Please note that only a GST-registered person can issue a tax invoice. Tax invoices can be issued in the following forms:-

a) Tax invoice i. Full tax invoice

ii. Simplified tax invoice b) Deemed tax invoice

i. Self-billed invoice ii. Invoice or statement of sales by auctioneer



Full Tax Invoice A full tax invoice must include the following:

1. the words ‘tax invoice’ in a prominent place; 2. the tax invoice serial number; 3. the date of issuance of the tax invoice; 4. the name, address and identification number of the supplier; 5. the name and address of the person to whom the goods or services are supplied; 6. a description sufficient to identify the goods or services supplied; 7. for each description, distinguish the type of supply for zero rate, standard rate and

exempt, the quantity of the goods or the extent of the services supplied and the amount payable, excluding tax;

8. any discount offered; 9. the total amount payable excluding tax, the rate of tax and the total tax chargeable to be

shown separately; 10. the total amount payable inclusive of the total tax chargeable; and 11. any amount referred to in subparagraphs (9) and (10), expressed in a currency, other

than Ringgit, shall also be expressed in Ringgit in accordance with paragraph 5 of the Third Schedule of the GST Act.

Any person who fails to issue a tax invoice or issues a tax invoice without the prescribed particulars commits an offence under the GST Act.



Tax Invoice Sample



Simplified Tax Invoice With the approval of the Director General, some registered persons may issue simplified tax invoices. A simplified tax invoice may be in the form of an invoice, receipt, voucher or any other similar documents that has the particulars approved by the Director General. Simplified tax invoices are normally issued under the circumstances that a full tax invoice may be impractical. Registered persons can apply to the Director General to omit certain particulars. For example,

1. the name and address of the recipient; and 2. the price and tax for each item to be shown separately.

Similar to a full tax invoice, a simplified tax invoice can be used to claim input tax credit. However, if the invoice does not contain the name and address of the recipient, the maximum allowable input tax claim cannot exceed RM30 (or the invoice amount should be RM500 or less).

“I believe we should all pay our tax bill with a smile. I tried - but they wanted cash.” ~ Anon.



Simplified Invoice Sample



Self-billed Invoice In general, a supplier issues tax invoices to customers. However, there are special cases where the value at the time of supply is unknown to the supplier. In such cases, a customer may issue a self-billed invoice to account for the supply of goods or services. It is important to take note that suppliers can only issue self-billed invoices with the approval of the Director General. The issuance of self-billed invoices by the recipient must be in line with the following criteria:

1. the value at the time of supply is not known by the supplier; 2. the recipient and the supplier are both registered persons; 3. the recipient and the supplier agree in writing to a self-billed invoice; and 4. the supplier and the recipient agree that the supplier shall not issue a tax invoice.

Any recipient that has obtained the Director General’s approval to issue self-billed invoices shall be subjected to the following conditions:

1. the document may, with the prior approval of the Director General, be treated as a tax invoice;

2. a copy of any self-billed invoice is provided to the supplier and another copy is retained by the recipient; and



3. in the case where the self-billed invoice is issued before the time of removal of such goods, or before the time the goods are made available, or before the time the services are performed, the self-billed invoice shall be issued with payment.

Self-billed invoices shall contain the following particulars: a. the supplier’s and recipient’s names, addresses and identification numbers; b. the word ‘self-billed invoice’ in a prominent place; c. the invoice serial number; d. the date of invoice; e. the reference number of Director General’s approval; f. a description sufficient to identify the goods or services supplied; g. for each description, distinguish the type of supply for zero rate, standard rate and exempt,

the quantity of the goods or the extent of the services supplied and the amount payable, excluding tax;

h. any discount offered; i. the total amount payable excluding tax, the rate of tax and the total tax chargeable to be

shown separately; j. the total amount payable inclusive of the total tax chargeable; and



k. any amount referred to in subparagraphs (i) and (j), expressed in a currency, other than Ringgit, shall also be expressed in Ringgit in accordance with paragraph 5 of the Third Schedule of the GST Act.

Lost or Misplaced Tax Invoices In the event that a tax invoice is lost or misplaced, the recipient may request the supplier to reissue the tax invoice. However, the reissued tax invoice must be marked as ‘COPY ONLY’ or ‘DUPLICATE’.



Pro forma Invoice Pro forma invoices are not regarded as tax invoices for the purpose of GST. A registered person can only offset his output tax against input tax if he has a tax invoice. Invoice in a Foreign Currency Tax invoices that are in foreign currency must be converted into RM for GST purposes. The following details must be denominated in RM:

a. the amount payable before GST; b. the total GST chargeable; and c. the total amount payable (including GST).

Note: Foreign currency amounts are converted into RM by using the open market rate of exchange at the time of supply of goods or services. For imports, the importer uses the exchange rates published by Customs that are updated every week. Other Circumstances There are some situations where a tax invoice is not required or must not be issued. For cases of mixed supplies, where there is an element of taxable and exempt supplies, a tax invoice is required to be issued.



Tax Invoice in Foreign Currency Sample



Type of Supply

Type of Supply Tax Invoice Details Zero-rated supplies and supplies without consideration

A tax invoice is not required to be issued when a registered person makes a zero-rated supply or a supply with no consideration.

Relief for Second-hand Goods (Margin Scheme) and Imported Services

A tax invoice must not be issued for a supply of second-hand goods for which tax is charged on the excess between the consideration for which the goods are supplied and acquired (margin). Similarly, a tax invoice must not be issued for any supply of imported services.

Mixed Supplies There are situations where a supplier may make exempt, zero-rated and/or standard-rated supplies simultaneously to the same customer and then issues one invoice to document such transactions. When such situation occurs, the tax invoice issued must clearly distinguish the taxability of the supplies (exempt, zero-rated or standard-rated) made and indicate separately the applicable values and the GST rate charged (if any) on each supply.



Record Keeping A taxable person must keep records in English or the national language concerning his liability to GST for 7 years. These records must be kept in Malaysia unless approved by the Director General to be kept offshore. The required tax records that are impacted by the requirement above are:

1. all records of goods and services that a person supplies or receives in the course of his business;

2. all records of goods imported; and 3. any other supporting document such as contracts and price quotations to show his liability

to GST.

The records above may be kept or stored in the form of: 1. physical books of accounts and paper based source documents including computer

printouts; 2. electronic records; and/or 3. all details of the accounting system including charts, codes of accounts, system and

program documentation and specification and instruction manuals.



Records that are kept in electronically readable formats must be readily accessible and easily converted into writing. In the event that records are kept in manual form and subsequently converted into electronic form, the records must be retained in its original form prior to its conversion (please refer to GST Guide on Tax Invoice Record Keeping). Please be mindful that certain non-taxable persons are also required to keep records in accordance to the requirements above. Examples of these non-taxable persons are as follows:

1. any person who has ceased to be a taxable person and has made or may make bad debt relief claim;

2. imported services supplied to a recipient who is a non-taxable person for the purposes of business;

3. goods of a taxable person sold by a non-taxable person to recover any debt owed by the taxable person;

4. supply by auctioneer who is a non-taxable person, in his own name on behalf of the principal/owner of the goods who is a taxable person; and

5. a non-taxable person in Malaysia who receives goods in the course or furtherance of business, from an Approved Toll Manufacturer.



Chapter 7: Credit Notes, Debit Notes and Bad Debt Relief



Credit Notes Credit and debit notes provide a mechanism that allows a trader to make the necessary GST adjustments to reflect the actual GST liability in his tax return. A taxable person is required to issue a credit note or a debit note in the event of a change in the consideration of supply or if there is a cancellation in the supply. Credit notes are issued when the amount previously invoiced is reduced or a transaction is cancelled. When a credit note is issued and output tax is paid:

1. The taxable person must reduce his output tax by the corresponding amount stated in the credit note in the return for the taxable period involved;

2. The customer, who is a registered person, must reduce his input tax in the return for the taxable period if he has claimed the input tax.



Credit Note Sample



Debit Notes Debit notes are issued when the amount previously invoiced is increased for the same supply. When a debit note is issued:

1. The taxable person must increase his output tax for the corresponding amount stated in the debit note in the return for the taxable period involved;

2. The customer, who is a registered person, can increase his input tax in the return for the taxable period.



Debit Note Sample



Credit and Debit Note Format Credit notes and debit notes must contain the following details:

1. the words “credit note” or “debit note” in a prominent place; 2. the serial number and date of issue; 3. name, address and identification number of the supplier; 4. the name and address of the person to whom the goods or services are supplied; 5. the reason for its issue; 6. a description which identifies the supply of goods or services; 7. the quantity and amount for each supply; 8. the total amount excluding tax; 9. the rate and amount of tax; and 10. the number and date of the original tax invoice.



Bad Debt Relief A taxable person is entitled to a relief for bad debts on the whole or any part of the tax paid by him for taxable supplies if:

1. the person has not received any payment in respect of the taxable supply from the debtor six months from the date of supply or the debtor has become insolvent before the period of six months has elapsed; and

2. sufficient efforts have been made by him to recover the debt.

A taxable person is entitled to claim bad debt relief even though the bad debt has not been written off. However, the taxable person must have some form of documentary proof to show that efforts have been made to recover the debt (example: reminder letter or notice to the customer). The supplier can claim bad debt relief as input tax in the return for the taxable period. The amount of bad debt relief must be declared in the appropriate field in the return for the taxable period in which the claim is made. In the event that the supplier has received only part payment, the bad debt relief shall be limited to the balance payment that has not been received.



Bad Debt Relief Computation The amount of input tax to be claimed can be computed using the following formula:

𝑥 = 𝐴𝐵 𝑋 𝐶

𝐴 = payment not received in respect of the taxable supply; B = consideration for the taxable supply; and C = tax due and payable on the taxable supply.

“The taxpayer - that's someone who works for the federal government but doesn't have to take the civil servant examination.” ~ Ronald Reagan



Bad Debt Relief Computation In the event that a claim for bad debt relief has been made by a taxable person and any payment in respect of the taxable supply for which the tax is payable is subsequently received by the person, the person shall repay to the Director General output tax that will be computed using the following formula:

𝑥 = 𝐴𝐵 𝑋 𝐶

𝐴 = payment received in respect of the taxable supply; B = consideration for the taxable supply; and C = tax due and payable on the taxable supply.

Please note: According to the GST General Guide, “When a taxable person fails to pay his supplier the consideration or any part thereof for the supply of any goods or services made by his supplier to him at the end of the period of six (6) months following the date of invoice issued, he shall deem the amount of the relevant input tax he first credited or refunded to him (the input tax that corresponds to the payment that has not been made), as his output tax. The deemed output tax should be included in his return in the immediate taxable period after the expiry of the six (6) months. When the taxable person subsequently pays his debt, he claims the GST paid as his input tax in the taxable period in which the payment is made.”



Bad Debt Relief Concept

If the bad debt relief is not claimed immediately after the expiry of the sixth month,

then the taxable person must apply in writing for the Director General’s approval on his intention to claim at a later date.



Chapter 8: Taxable Period, Accounting Basis, Furnishing of Returns and Payment of Tax



Taxable Period Category of taxable period will depend on annual sales:

Annual Sales Taxable period RM5 mil and above One month Less than RM 5 mil Three month

“Taxes, after all, are the dues that we pay for the privileges of membership in an organized society.” ~ Franklin D. Roosevelt



Accounting Basis Payment basis How it works Advantages Disadvantages Account for GST in the

taxable period in which you make or receive payment Payment basis requires approval from the Director General.

Suitable for small businesses, especially it uses the cash system. GST can be easily accounted with the cash books.

Ideal for those that give customers lengthy credit, GST will only be accounted once payment is received.

GST can only be claimed on purchases and expenses after making payment to the supplier.

Invoice basis How it works Advantages Disadvantages Account for GST in the

taxable period which you receive or issue an invoice or receive and make a payment, whichever comes first.

GST can be claimed on purchases and expenses before making payment to the supplier.

GST may have to be accounted before receiving payment.



GST Returns GST returns and payments have to be submitted using the forms GST-03 no later than the last day of the month following the end of the taxable period.

Payment of Tax Payment must be made not later than the last day to the Director General and can be made by:

a) Electronic Funds Transfer (EFT) b) Cheques c) Bank drafts; or d) Money order or postal order.

“The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help'.” ~ Ronald Reagan



GST Returns and Payments



Penalty for Late Payment

Tax Remains Unpaid Rate of Penalty Cumulative 1-30 Days 5% 5% 31-60 Days 5% 10% 61-90 Days 3% 13% 91-120 Days 3% 16% 121-150 Days 3% 19% 151-180 Days 3% 22% 181 Days or More 3% 25%

GST Declaration and Payment by Non-Taxable Person A non-taxable person is one who is not liable for GST registration but will still be required to account for tax in a declaration form by using the GST-04 form. The GST declaration must be furnished and the amount of tax due must be paid before the deadline. For example, an individual who imports services for the purposes of business will be required to do so.



Chapter 9: Input Tax



Input Tax Input tax is the GST incurred by a taxable person on the acquisition of goods and services for the purpose of making a taxable supply. These acquisitions include:

1. goods or services purchased or acquired locally; and 2. goods or services imported.

Note: Input tax includes any flat rate addition which an approved person under a flat rate scheme would include in the consideration for any taxable supply of goods made by him in a prescribed activity under the scheme.



Mechanism to Claim Input Tax Input tax claims can be made in the return for the taxable period in which the supply or importation takes place by offsetting against the output tax. A refund is made when the amount of input tax is more than the amount of output tax. If input tax was not claimed in the taxable period that it is supposed to be claimed, the input tax can be claimed within 6 years after the date of the supply or importation.

Allowable Input Tax Input tax incurred on the following supplies is allowed to be claimed:

1. a taxable supply (standard-rated supply or zero-rated supply); 2. a disregarded supply such as supplies between group members registered under group

registration; 3. an incidental exempt supply such as an inter-company loan and loan to staff; 4. a supply given relief; or 5. supplies made outside Malaysia which would be taxable supplies if made in Malaysia.



Criteria for Claiming Input Tax Input tax incurred can be deducted from the output tax under the following conditions:

1. The claimant is a taxable person; 2. The goods or services are acquired for the purpose of business; 3. The goods or services are acquired for the purpose of making taxable supplies; 4. The claimant must hold a valid tax invoice in respect of a supply or a valid customs

importation document Customs No. 1 in respect of importation of goods; 5. A full tax invoice must be issued under the name of the claimant. A tax invoice issued under

the name of employees will not be eligible for input tax credit except for mobile phone bill expenses used for business purposes, as long as the expenses are reimbursed and accounted as business expenses; and

6. The goods or services are not subject to input tax restriction such as passenger motor vehicle, family benefits and club subscriptions.



Blocked Input Tax Input tax incurred by a taxable person in respect of the following supplies shall be excluded from any credit under GST:

1. the supply to or importation by him of a passenger motor car; 2. the hiring of a passenger motor car; 3. club subscription fee; 4. medical and personal accident insurance premium; 5. medical expenses; 6. family benefits; and 7. entertainment expenses to a person other than employees or existing customers except

entertainment expenses incurred by a person who is in the business of providing entertainment.



Incidental Exempt Financial Supplies A taxable person is eligible to claim input tax attributable to the following exempt financial supplies if he is not a financial institution:-

1. the deposit of money; 2. the exchange of currency whether effected by the exchange of currency, bank notes or coin

by crediting or debiting accounts or otherwise; 3. the holding of bonds, debentures, notes or other similar instruments representing or

evidencing indebtedness; 4. the transfer of ownership of securities or derivatives relating to securities; 5. the provision by a taxable person of any loan, advance credit or other similar facility to his

employee or between connected persons; 6. the holding or redemption of any unit or other similar instruments under a trust fund; and 7. the hedging of any interest rate risk, currency risk, utility price risk, freight price risk or

commodity price risk.



Refund of Input Tax Refund of input tax will be made within 14 working days for online submission and 28 working days for manual submission from the date the return is received. The whole or any part of any input tax due to a taxable person in any taxable period may be carried forward to the following or any subsequent taxable period upon application in writing by the taxable person or under the Director General’s directive. Taxes, penalties or surcharges that have been overpaid or erroneously paid by a taxable person may be claimed by amending form GST-03 for overpayments. In the case of a non-taxable person, the claim may be made by amending form GST-04 within 6 years from the date the overpayment occurs or erroneous payment occurs. The Director General may withhold the payment of refund if:

1. the taxable person fails to submit any previous return or furnish information; 2. there is a reasonable ground that the refund is not due to the taxable person; or 3. the taxable person does not comply with any condition imposed by the Director General.

Any refund of input tax may be offset against unpaid GST, unpaid sales tax, unpaid service tax, any penalty payable, any surcharge accruing, any fee, other moneys payable, excise duty, import and export duties.



Getting Ready for GST



Appendix



Source of Information

Regulatory Reference Title Act 762 GST Act 2014

GST Regulations P.U. (A) 188 GST (Advance Ruling) Regulations 2014 P.U. (A) 189 GST (Review and Appeal) Regulations 2014 P.U. (A) 190 GST Regulations 2014

GST Orders P.U. (B) 319 Appointment Of Date Of Coming Into Operation P.U. (B) 320 Appointment Of Effective Date For Imposition Of Goods And Services

Tax P.U. (A) 183 Goods and Services Tax (Amount of Taxable Supply) Order 2014 P.U. (A) 184 Goods and Services Tax (Rate of Tax) Order 2014 P.U. (A) 185 Goods and Services Tax (Application To Government) Order 2014 P.U. (A) 186 Goods and Services Tax (Tax Agent Application Fee) Order 2014

http://gst.customs.gov.my/en/rg/SiteAssets/gst_bill/BI%20ACT%20762.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_regulation/pua_20140701_P.U.%20(A)%20188-Peraturan-Peraturan%20Cukai%20Barang%20dan%20Perkhidmatan%20(Ketetapan%20Awal)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_regulation/pua_20140701_P.U.%20(A)%20188-Peraturan-Peraturan%20Cukai%20Barang%20dan%20Perkhidmatan%20(Ketetapan%20Awal)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_regulation/pua_20140701_P.U.%20(A)%20190.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pub_20140630_P.U.%20(B)%20319-penetapan%20tarikh%20permulaan%20kuat%20kuasa.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pub_20140630_P.U.%20(B)%20320-penetapan%20tarikh%20efektif%20bagi%20pengenaan%20cukai%20barang%20dan%20perkhidmatan.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pub_20140630_P.U.%20(B)%20320-penetapan%20tarikh%20efektif%20bagi%20pengenaan%20cukai%20barang%20dan%20perkhidmatan.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20140630_P.U.%20(A)%20183-PERINTAH%20CUKAI%20BARANG%20DAN%20PERKHIDMATAN%20(AMAUN%20PEMBEKALAN%20BERCUKAI)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20140630_P.U.%20(A)%20184-PERINTAH%20CUKAI%20BARANG%20DAN%20PERKHIDMATAN%20(KADAR%20CUKAI)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20140630_P.U.%20(A)%20185-PERINTAH%20CUKAI%20BARANG%20DAN%20PERKHIDMATAN%20(PEMAKAIAN%20KEPADA%20KERAJAAN)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20140630_P.U.%20(A)%20186-PERINTAH%20CUKAI%20BARANG%20DAN%20PERKHIDMATAN%20(FI%20PERMOHONAN%20EJEN%20CUKAI)%202014.pdf



P.U. (A) 187 Goods and Services Tax (Imposition of Tax for Supplies In Respect of Designated Areas) Order 2014

P.U. (A) 271 Goods and Services Tax(Exempt Supplies) P.U. (A) 272 Goods and Services Tax(Zero Rated Supplies) P.U. (A) 272, Item 2, First Schedule

National Essential Medicines List

P.U. (A) 273 Goods and Services Tax(Relief)

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20140630_P.U.%20(A)%20187-PERINTAH%20CUKAI%20BARANG%20DAN%20PERKHIDMATAN%20(KAWASAN%20DITETAPKAN)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20140630_P.U.%20(A)%20187-PERINTAH%20CUKAI%20BARANG%20DAN%20PERKHIDMATAN%20(KAWASAN%20DITETAPKAN)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20141013_P.U.%20(A)%20271-perintah%20cukai%20barang%20dan%20perkhidmatan%20(pembekalan%20dikecualikan)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20141013_P.U.%20(A)%20272%20-%20Perintah%20CBP%20(Pembekalan%20Berkadar%20Sifar)%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/Senarai%20Ubat-ubatan%20Penting%20Nasional%20Yang%20Dikenakan%20GST%2023%20Okt%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_order/pua_20141013_P.U.%20(A)%20273-perintah%20cukai%20barang%20dan%20perkhidmatan%20(pelepasan)%202014.pdf



Guides

General Guides

General Guides (revised as at 27 Oct 2013) Handbook for GST for Businesses

Industry Guides

Accommodation Premises and Similar Establishment (revised as at 14 Jul 2014) Advertising Services Agent (revised as at 22 Jul 2013) Agriculture, Fisheries and Livestock Industry (revised as at 20 Sep 2014) Airline Industry Approved Jeweller Scheme (revised as at 6 May 2014) Approved Toll Manufacturer Scheme (revised as at 27 Oct 2013) Approved Trader Scheme Auctioneer (revised as at 18 Jul 2013) Bereavement Care Services Industry (revised as at 24 Nov 2014) Commercial Banking (revised as at 4 Jan 2014)

http://gst.customs.gov.my/en/rg/SiteAssets/general_guides/Revised/General%20Guide%20-revised%20as%20at%2027%20October%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/general_guides/Handbook%20Vol1%2002092014%20Master.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Accomodation%20revised%20BI140714%20G5.pdf

http://gst.customs.gov.my/en/rg/SiteheaAssets/industry_guides_pdf/Revised/Guide%20on%20Advertising%20Services%20to%20UPLOAD%20%2028%20January%202014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Agent%20-revised%20as%20at%2022%20July%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Agriculture,%20Fisheries%20and%20Livestock%20Industry%2020092014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20Airline%20Industry%20-July%202013_.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Bi%20AJS%20261013%20for%20portal%20G5%20T.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Bi%20ATMS%20-271013%20as%20on%20301213.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Bi%20ATS%20261013%20G5%20Treatment.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Auctioneer%20-revised%20as%20at%2018%20July%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20BEREAVEMENT%20CARE%20SERVICES%20IND%2024112014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/GST%20Guide%20On%20Commercial%20Banking%20-%20revised%20as%20at%204%20January%202014.pdf



Construction Industry (revised as at 18 Nov 2013) Co-operatives (revised as at 14 Nov 2014) Development Financial Institution (revised as at 30 Jan 2014) Direct Selling (revised as at 27 Nov 2013) Duty Free Shop (revised as at 27 Oct 2013) E-Commerce (revised as at 20 Aug 2014) Forestry Industry (revised as at 26 Aug 2014) Freight Transportation Fund Management (revised as at 27 Oct 2013) Free Industrial Zone and Licensed Manufacturing Warehouse

(revised as at 5 Jan 2014)

Government, Local Authority and Statutory Body (revised as at 10 Nov 2014) Healthcare Services (revised as at 19 Nov 2014) Hire Purchase and Credit Sale (revised as at 17 Dec 2013) Insurance and Takaful (revised as at 22 Oct 2014) Islamic Banking (revised as at 30 Jan 2014) Investment Banking (revised as at 13 Mar 2014) Leasing (revised as at 28 Oct 2013) Legal Practitioners (revised as at 3 Sep 2014)

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20Construction%20Industry%20(revised%20as%20at%2018%20November%202013).pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20COOPERATIVES%2014112014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20DFI%20to%20UPLOAD%203012214%20G5%20T.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/GUIDE%20on%20Direct%20Selling%20to%20upload%20150114%20ex9%20omitted.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Duty%20Free%20Shop%20-%20revised%20as%20at%2027%20October%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20E-commerce%2020.08.2014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20FORESTRY%2026082014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Freight%20Transportation%20Guide%20-June%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Fund%20Management%20Industry%20-%20%20revised%20at%2027%20October%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Bi%20FIZ%20and%20LMW%20-%20271013_to%20upload5.1.14.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Bi%20FIZ%20and%20LMW%20-%20271013_to%20upload5.1.14.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20GOVERNMENT%2010112014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20HEALTHCARE%20SERVICES%2019112014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/GST%20Guide%20HP%20revised%20as%20at%20171213.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20INSURANCE%20and%20TAKAFUL%2022102014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/GST%20Guide%20On%20Islamic%20Banking.to%20UPLOAD%2026010114%20G5%20Treatment.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Investment%20Banking%20Guide%201%20_130314_%20G5.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/GST%20Guide%20on%20Leasing%20updated%20para%2011%20(5)%20(Revised%20as%20at%202%20December%202013).pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20Legal%20Practitioners%2003092014.pdf



Manufacturing (revised as at 1 Jan 2014) Money Lending Money Services Business (revised as at 7 Apr 2014) Passenger Transportation Pawnbroking (revised as at 11 Sep 2014) Petroleum Downstream Petroleum Upstream (revised as at 17 Oct 2014) Postal and Courier Services Pre-tertiary Education (revised as at 17 Dec 2014) Professional Services (revised as at 14 Nov 2014) Property Developer (revised as at 11 Mar 2014) Relief for Second-Hand Goods (Margin Scheme) (revised as at 11 Nov 2013) Repossession Retailing (revised as at 30 Dec 2013) Share Issuing House & Share Registrar (revised as at 10 Jan 2014) Shipping Industries Societies and Similar Organizations (revised as at 18 Dec 2014) Telecommunication Services (revised as at 19 Jul 2014) Travel Industry (revised as at 10 Aug 2014)

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Manufacturing%20-%20010114.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20Money%20Lending%20190513%20G5%20Treatment%2020130701.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20MSB%20%20070414.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Passenger%20Transportation%20Guide%20-June%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20PAWNBROKING%2011092014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20Petroleum%20%20Downstream%20G5%20Treatment%2020130802.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20PETROLEUM%20UPSTREAM%2017102014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Postal%20and%20Courier%20Services%20Guide%20as%20at%2031%20October%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20PRETERTIARY%20EDUCATION%2017122014%20(1).pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20PROFESSIONAL%20SERVICES%2014112014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20Property%20Developer%20%20updated%20draft%20as%20at%2011%20Mac%202014%20-%20amended%20_1.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20relief%20for%20second-hand%20goods(revised%20as%20at%2011%20Nov%202013).pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Repossession-revised%20as%20at%206%20November%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/F2Retailing%20Guide%20130114.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/GST%20Guide-Share%20Issuing%20House%20to%20load%20100114--1%20G5%20Treatment.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Shipping%20Industries%20Guide.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20SOCIETIES%20AND%20SIMILAR%20ORG%2018122014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Guide%20on%20Telco%20BI%2019%20July%202014%20G5.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20Travel%20Industry%20-10082014.pdf



Trustee Services Venture Capital (revised as at 25 Oct 2013) Valuers, Appraisers and Estate Agents (revised as at 31 Oct 2014) Warehousing Scheme (revised as at 27 Oct 2013) Webhosting (revised as at 23 Aug 2014)

Specific Guides

Capital Goods Adjustment Designated Areas (revised as at 11 Nov 2013) Employee Benefits (revised as at 21 Jul 2014) Export (revised as at 4 Nov 2013) Free Commercial Zone (revised as at 22 Jul 2014) Import (revised as at 4 Nov 2013) Inland Clearance Depot Input Tax Credit (revised as at 27 Oct 2013) Partial Exemption (revised as at 21 Nov 2014) Payment Basis (revised as at 30 Jan 2014) Registration (revised as at 23 Apr 2014)

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/GST%20Guide-Trustee%20ServicesUPLOAD180114-1.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/GST%20Guide%20on%20Venture%20Capital%2025102013%20G5%20Treatment.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20VALUERS%20APPRAISERS%20and%20ESTATE%20AGENTS%2031102014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Revised/Bi%20Warehousing%20scheme%20-%20271013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/industry_guides_pdf/Guide%20on%20WEBHOSTING%2023082014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Capital%20Goods%20Adjustment%20%20040113.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/BI%20Designated%20Area%20-revised%20as%20at%20271013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Employee%20Benefits%20-%2021.7.14.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Guide%20on%20Export%20-%20revised%20as%20at%204%20Nov%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Bi%20FCZ%20%2022.7.14.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Guide%20on%20Import%20-%20revised%20as%20at%204%20Nov%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Bi%20ICD%20-%20revised%20as%20at%20271013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Input%20tax%20guide%20050413%20-updated%20271013%20G5%20Treatment.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Guide%20on%20PARTIAL%20EXEMPTION%2021112014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/GST%20Guide%20on%20Payment%20Basis%20(Revised%20as%20at%2030%20January%202014).pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Guide%20on%20Registration%20-%2023April2014(Final).pdf



Supply (revised as at 25 Oct 2013) Tax Invoice and Records Keeping (revised as at 20 July 2014) Transfer of Business as a Going Concern (revised as at 27 Oct 2013) Transitional Rules (revised as at 10 Jul 2014) Valuation (revised as at 21 Mar 2014)

Accounting Software Guide

Enhance Your Accounting Software To Be GST Compliant (revised as at 11 Sep 2014)

Tax Agent Guides

Application Guide for GST Tax Agent

GST Forms Guidelines

GST-01 Guidelines GST-03 Guidelines

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Supply%20-revised%20at%2025%20October%202013.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Tax%20Invoice%20and%20Records%20Keeping%2020072014.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Bi%20TOGC%20-%20271013%20G5%20Treatment.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Transitional%20Guide%204%2028301013%2029BI%20G5%20updated%2020140710.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/specific_guides_pdf/Revised/Valuation%20Guide%20G5%20Treatment.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/accounting_software/Guide%20on%20ACCOUNTING%20SOFTWARE%2011092014.pdf

http://www.treasury.gov.my/pdf/percukaian/kelulusan_ejen_cukai/Panduan_Permohonan_EjenCukaiGST_190814.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_forms/GST01%20Guide%20updated%2020140206.pdf

http://gst.customs.gov.my/en/rg/SiteAssets/gst_forms/Panduan%20Mengisi%20Borang%20GST03%20kemaskini%2018%20Nov%202013.pdf



GST Forms

Form No. Form Description GST – 01 Application For Goods And Services Tax Registration GST – 02 Application For Group / Joint Venture Registration GST - 2A Group Member / Venturer Registration GST - 2B Notice Of Change Of Representative Member / Venture Operator And

Removal Of Group Member / Venturer GST – 03 Goods And Services Tax Return GST – 04 Goods And Services Tax Declaration By Person Other Than A Taxable

Person GST – 05 Registration Of Branch Or Division GST – A Registration / Inclusion / Removal / Update Of Director / Owner /

Partner /Principal Office Bearer / Capital Market Services Representative / Authorized Person

GST – B Registration / Inclusion / Update Of Sole Proprietorship Entity GST – C Details Of Overseas Principal GST - Adm 02 Auction / Sale In Satisfaction Of Debt Details For GST Registered

Principal



GST - Adm 03 Application For Approved Trader Scheme / Approved Toll Manufacturer Scheme / Approved Jeweller Scheme

GST - Adm 04 Details Of Finished Goods / Services Supplied Under Approved Trader Scheme / Approved Toll Manufacturer Scheme / Approved Jeweller Scheme

GST - Adm 05 Details Of Raw Materials / Components / Accessories And Machine Imported Under The Approved Trader Scheme

GST - Adm 06 Details Of Principal And Value Added Activities Under The Approved Toll Manufacturer Scheme

GST - Adm 07 Local Customer Details And Undertaking For Approved Toll Manufacturer Scheme

GST - Adm 08 Raw Materials / Components Details Under Approved Toll Manufacturer Scheme

GST - Adm 09 Details Of New Application / Additional Supplier Of Local Precious Metal Under The Approved Jeweller Scheme

GST - Adm 10 Application For Flat Rate Scheme/ Relief For Second-Hand Goods / Self-Billed Invoice

GST - Adm 11 Supplier Details And Undertaking Under Self-Billed Invoice Scheme GST - Adm 12 Application For Goods And Services Tax Registration Exemption



GST - Adm 13 Application For Cancellation Of Goods And Services Tax Registration / Special Scheme

GST - Adm 14 Form A (Regulation 3) Application For Review GST - Adm 15 Installment Plan Application GST - Adm 16 Application for an Advance Ruling GST - Adm 17 Application for Extension of Time to Submit Additional Documents /

Information GST - Adm 18 Withdrawal of Issued Advanced Ruling Application GST - Adm 19 Application for Withdrawal of Issued Advanced Ruling GST - Adm 20 Application for Extension of Advance Ruling



Important Definitions Terminology Interpretation Business Any trade, commerce, profession, vocation or any other similar

activity, whether or not it is for a pecuniary profit. Criteria to determine whether an activity qualifies as a business for GST purposes:

1. It is a serious undertaking or work earnestly pursued; 2. It is pursued with reasonable or recognizable continuity; 3. It is conducted in a regular manner and on sound and

recognized business principles; 4. It is predominantly concerned with making supplies for a

consideration; or 5. It is making supplies of a kind commonly made by commercial

organizations. Note: The following are deemed to be carrying on a business:

1. Provision by a club, association, society, management corporation, joint management body or organization of the



facilities or benefits available to its members or parcel proprietors;

2. The admission, for a consideration, of persons to any premise. Examples of non-business activities:

1. Holding of shares; 2. Supply of services by employees under contract of

employment; 3. Hobbies.

Goods Any kind of movable and immovable property excluding money.

Note: Money does not include:

1. A bank note or coin before it becomes legal tender in Malaysia or in any other country; or

2. A collector’s piece, investment article or item of numismatic interest.

Input Tax 1. Tax on any supply of goods and services to a taxable person; and

2. Tax paid or to be paid by a taxable person on any importation



of goods where the goods or service are used for the purposes of any business carried on by the taxable person.

Output Tax Tax on any taxable supply of goods or services made by a taxable

person in the course or furtherance of his business in Malaysia.

Taxable Person Includes: 1. Individual; 2. Sole proprietor; 3. Partnership; 4. Corporation; 5. Federal Government; 6. State Government; 7. Statutory body 8. Local or public authority; 9. Society; 10. Club; 11. Trade union; 12. Co-operative; 13. Trustee; and 14. Any other body, organization, association, or group of persons



whether corporate or unincorporated.

Taxable Supply A supply of goods and services that are standard-rated supply and zero-rated supply and does not include an exempt supply.

Services Anything done or to be done including the granting, assignment or surrender of any right or the making available of any facility or benefit but excludes supply of goods or money.

Imported Services Any services by a supplier who belongs in a country other than Malaysia or who carries on business outside Malaysia, to a recipient who belong in Malaysia, and the services are consumed in Malaysia.

Supply All forms of supply, including supply of imported services, done for a consideration and anything, which is not a supply of goods but is done for a consideration is a supply of services.



Penalties Section Offence Punishment 96 General penalty Fine not exceeding RM30,000 or

imprisonment for a term not exceeding 2 years or both

6(3) Impersonation of a GST officer Fine not exceeding RM50,000 or imprisonment for a term not exceeding 3 years or both

31(7) Failure of a personal representative to notify the DG within 21 days of carrying on the business and of the date of the death, liquidation, receivership, bankruptcy or the nature of the incapacity and the date on which it began

Fine not exceeding RM5,000 or imprisonment for a term not exceeding 1 year or both

33(11) Issuance of an invoice with GST for any non-taxable supply Issuance of an invoice with GST by a non-registered person

Fine not exceeding RM30,000 or imprisonment for a term not exceeding 2 years or both, and a penalty of two times the amount of tax

36(7) Failure to keep full and true records for 7 years in Fine not exceeding RM50,000 or



Section Offence Punishment BM/English imprisonment for a term not

exceeding 3 years or both 41(6) Failure to furnish returns Fine not exceeding RM50,000 or

imprisonment for a term not exceeding 3 years or both

41(7), 42(3)

Failure to pay tax Fine not exceeding RM50,000 or imprisonment for a term not exceeding 3 years or both

74(6), 74(7)

Flat Rate Scheme: - Failure by an approved person to issue an

invoice - Inclusion of flat rate addition by an

approved person for non-prescribed activities or to non-registered persons

- Issuance of an invoice or receipt inclusive of flat rate addition by a non-approved person

Fine not exceeding RM15,000 or imprisonment for a term not exceeding 2 years or both and a penalty of the amount of prescribed flat rate addition

81(5) Refusal to permit any GST senior officer to enter any place or premise where any person carries on his business

Fine not exceeding RM100,000 or imprisonment for a term not exceeding 7 years or both



Section Offence Punishment 86(3) Failure to surrender on demand to a GST senior

officer movable goods seized and temporarily returned

Fine not exceeding RM10,000 or imprisonment for a term not exceeding 1 year or both

88 Making an incorrect return by: - Omitting information - Understating output tax or overstating

input tax - Gives incorrect information

Fine not exceeding RM50,000 or imprisonment for a term not exceeding 3 years or both and a penalty equal to the tax undercharged

89(1) Intention to evade or assist other persons to evade tax by:

- Omitting information - Making any false statement or entry - Giving any false answer in writing or

otherwise - Preparing/maintaining/authorising the

preparation/maintenance of any false books of accounts, false invoices, or other false records

- Falsifying/authorising the falsification of any books of accounts, invoices or records

For the first offence, a fine of not less than 10 times and not more than 20 times the amount of tax or imprisonment for a term not exceeding 5 years or both, and for a second or subsequent offence, a fine of not less than 20 times and not more than 40 times the amount of tax or imprisonment for a term not exceeding 7 years or both Where the amount of tax cannot be



Section Offence Punishment - Making/using/authorizing the use of any

fraud, artifice, or contrivance ascertained, a fine of not less than RM50,000 and not more than RM500,000 or imprisonment for a term not exceeding 7 years or both

89(2) Assisting in or advising the preparation of any return that understates the tax liability of another person

Fine not less than RM2,000 and not more than RM20,000 or imprisonment for a term not exceeding 3 years or both

90 Improperly obtaining refunds or reliefs Fine not exceeding RM50,000 or imprisonment for a term not exceeding 3 years or both and penalty of 2 times the amount refunded or entitled as a relief in excess of the amount properly so refundable or so entitled as a relief

91(1) Possession, acceptance, or dealing with any goods or services with reasonable cause to believe that the tax had been or will be evaded

Fine not exceeding RM30,000 or imprisonment for a term not exceeding 2 years or both, and penalty of 2 times the tax amount

91(3) Issuance of an invoice or receipt inclusive of GST Fine not exceeding RM30,000 or



Section Offence Punishment by a non-registered person imprisonment for a term not

exceeding 3 years or both and a penalty of 2 times the tax amount shown

92 Penalty for obstructing, etc., GST officer, or failure to give any GST officer reasonable facilities or assistance

Fine not exceeding RM100,000 or imprisonment for a term not exceeding 7 years or both

94 Authorized person who - withholds any portion of tax or penalties

collected - demands from any person an amount in

excess of the tax or penalty - defrauds any person, embezzles any

money, or uses his position to deal wrongfully with the DG or any other individual

Unauthorized person who collects or attempts to collect any tax under the GST Act

Fine not exceeding RM50,000 or imprisonment not exceeding 3 years or both

95 Attempts and abetments of any offence Respective punishments provided for the offence



Section Offence Punishment 113 Disclosure of informer’s information by GST

officer Fine not exceeding RM100,000 or imprisonment for a term not exceeding 7 years or both



Imprisonment for non-payment of fine (Section 111)

Where the fine The maximum period does not exceed RM5,000 2 months exceeds RM5,000 but does not exceed RM10,000

4 months

exceeds RM10,000 but does not exceed RM20,000

6 months

for every subsequent RM10,000 2 additional months until a maximum period of 6 years is reached